SACRAMENTO - In the face of fierce opposition from high-tech companies, landmark state legislation to limit public agencies from using radio frequency devices was dealt a major setback Thursday.

The Assembly Appropriations Committee, without discussion, shelved the measure for the year, though Sen. Joe Simitian, who has been pushing the proposal, vowed to try to revive it before the Legislature adjourns for the year on Sept. 9.

At issue was whether advanced forms of the technology would threaten personal privacy if embedded in millions of state-issued driver's licenses, public school IDs, government health benefit cards and public library cards as well as subject people to tracking by ``Big Brother'' government agencies.

``The bottom line is this deserves a lot more thoughtful consideration and more study,'' said Greg Larsen, a spokesman for a high-tech coalition opposed to the measure by Simitian, D-Palo Alto. ``The senator's bill,'' he contended ``banned a technology that's never had a security breach anywhere in the world.''

``That's an unfortunate mischaracterization,'' responded a disappointed Simitian, who said the bill provided a three-year ``time out'' for expanding the technology, not a ban.

Three prongs

Simitian's AB 682 -- the Identity Information Protection Act of 2005 -- had three main prongs: prohibits skimming or theft of information on RFID devices; ensures that future attempts by the state to use the technology would include strong security protection and encryption of personal data; and institutes the three-year moratorium.

The legislation, which had previously passed the Senate, is sponsored by the American Civil Liberties Union, the Electronic Frontier Foundation and the Privacy Rights Clearinghouse.

Business opponents were troubled that the proposal would give a black eye to the technology used by businesses from farms to big-box stores to track everything from cows to pallets of corn chips.

``I just think he's a little misguided in his mistrust of this technology that can help society,'' said Jeffrey Katz, vice president of marketing for San Jose-based Atmel, which manufactures RFID chips. Asked how he felt after Thursday's action, Katz wrote in an e-mail ``elated is too strong a word. I am encouraged.''

Simitian said he was not seeking to restrict RFID, seen as the next generation bar code, in private industry or for such existing uses as the FasTrak lanes on Bay Area bridges. Instead he said he is advancing a moratorium for new uses of the technology by the state and local governments ``before we let the genie out of the bottle.''

A friend of high-tech companies, Simitian has been honored by the American Electronics Association as its assemblyman of the year. Still, he faced a coordinated campaign orchestrated by the tech industry. Some companies are part of the Washington-based High-Tech Trust Coalition that's fighting the measure. Others have hired a small cadre of lobbyists and public relations consultants to deliver their message to lawmakers.

Lobbying effective

It is the most visible tech lobbying effort since Silicon Valley firms were energized in 2002 and 2003 by legislation that eventually was signed into law to recycle electronic waste.

Use of the RFID technology, which came into its own during World War II, has jumped as the cost has dropped. In its most basic configuration, an RFID tag contains a chip with a unique number and an antenna that transmits the information to a mechanical device known as a reader. It then sends the information to a central database.

The legislation grew out of a controversy at a Sutter County school north of Sacramento that required students to wear identification badges that tracked their movement on campus. The program was ended but the dust-up over the badges attracted worldwide publicity.